The behavior-based TD Ameritrade (AMTD) Investor Movement Index (IMX), which aggregates Main Street investor positions, rose 4.4% to 5.49 in September as retail investors increased their exposure to the U.S. equity markets for the second month in a row. The S&P 500 was relatively flat in September, while the VIX, or so-called fear index, remained low except for a mid-month spike.
"The IMX soared to its highest point in two years at a time when the major equity markets were at or near their all-time highs as well," said JJ Kinahan, chief strategist at TD Ameritrade. "As earnings season gets underway in earnest this month, and the election looms, it will be interesting to watch whether clients change up some of their investment decisions after a couple months of volatility being quiet."
Each month, TD Ameritrade pulls a sample from its client base of 6 million funded accounts that includes all accounts that completed a trade in the past month. The holdings and positions of this statistically significant sample are evaluated to calculate individual scores, and the median of those scores represents the monthly IMX.
Among the stocks being purchased were dividend-payers Verizon Communications (VZ) and AT&T (T) . Both telecoms yield more than 4% and have seen downward pressure since setting new highs in July. Another stock picked up by investors was tech sector favorite Facebook, which set another all-time high early in the month.
On the flip side, TD Ameritrade clients unloaded some popular and widely held names in September, such as Apple (AAPL) which saw gains during the period surrounding the announcement of its new model of phones. Netflix (NFLX) was also net sold as were Alibaba (BABA) and Intel (INTC) .